Bitcoin News Today: Bitcoin ETFs on Track to Hold 1.5 Million BTC by Year-End Amid Strong Inflows

Bitcoin spot exchange-traded funds (ETFs) are projected to hold more than 1.5 million BTC by year-end if the current inflow trend continues, according to data tracked by WalletPilot. This would surpass most estimates of lost Bitcoin, which stand at approximately 1.4 million BTC [1]. As of August 13, U.S. spot Bitcoin ETFs held around 1.296 million BTC, accounting for nearly 6.5% of the circulating supply. Over the past 30 days, these funds added approximately 17,393 BTC, a pace that—should it remain stable—would push total holdings above 1.5 million BTC by December [1].

BlackRock’s iShares Bitcoin Trust (IBIT) dominates the landscape, holding about 744,500 BTC as of the latest report. This represents roughly 3.3% of the total Bitcoin supply and has been accumulated since the fund’s launch in January 2024 [1]. At the current average monthly addition rate of 4,300 BTC, IBIT alone could add approximately 130,000 BTC to its reserves by year-end if inflows remain consistent [1]. This level of concentration raises concerns about the centralization of Bitcoin holdings within a single issuer.

The ETF accumulation has occurred alongside Bitcoin’s recent surge to record highs near $124,000, driven by expectations of Federal Reserve interest rate cuts later this year [1]. These funds have attracted over $50 billion in assets under management within just over a year, with inflows outpacing new Bitcoin issuance from mining. Daily mining output is currently near 450 BTC following the April 2024 halving, further tightening the available supply in secondary markets [1].

At a flat inflow rate matching the current monthly average, ETFs are estimated to add approximately 70,000 BTC by year-end [1]. If inflows were to accelerate—say, doubling to 34,000 BTC per month—reserves could exceed 1.6 million BTC. Such a scenario would intensify the pressure on tradable supply, increasing price sensitivity to macroeconomic shifts and fund-specific investor flows [1].

The growing concentration of Bitcoin within a small number of ETFs also has structural implications. Many ETFs hold Bitcoin in baskets that are not directly redeemable for physical coins by most shareholders, meaning that even as ETF shares trade on secondary markets, the underlying liquidity may remain constrained [1]. This could influence price discovery as ETF demand becomes a larger component of total trading volume.

While inflows have been consistent in recent months, they are not guaranteed to continue at the same rate. Shifts in macroeconomic conditions, increased profit-taking at higher prices, or regulatory changes—such as modifications to redemption mechanisms or broader securities law adjustments—could all impact the trajectory [1]. The coming four months will be critical in determining whether the 1.5 million BTC threshold is reached.

At present rates, the milestone appears attainable, highlighting the evolving relationship between institutional investment vehicles and the underlying supply of Bitcoin [1]. This trend underscores the growing influence of ETFs in shaping the digital asset’s market dynamics.

Source: [1] Bitcoin ETFs to lock up 1.5 million BTC by New Year as supply squeeze tightens grip – https://cryptoslate.com/bitcoin-etfs-to-lock-up-1-5-million-btc-by-new-year-as-supply-squeeze-tightens-grip/